Exclusive-US sanctions on China refiners over Iran oil disrupt operations, sources say

Siyi Liu, Trixie Yap and Chen Aizhu

Thu, May 8, 2025, 4:11 AM 3 min read

By Siyi Liu, Trixie Yap and Chen Aizhu

SINGAPORE (Reuters) -Recent U.S. sanctions connected 2 tiny Chinese refiners for buying Iranian lipid person created difficulties receiving crude and led them to merchantability merchandise nether different names, sources acquainted with the substance said, grounds of the disruption that Washington's stepped-up unit is inflicting connected Tehran's biggest lipid buyer.

The targeting of autarkic refiners, known arsenic teapots, marked an escalation successful Washington's efforts to chopped disconnected Tehran's export gross arsenic President Donald Trump seeks to unit Iran into a woody implicit its atomic programme.

Washington's sanctions against Shandong Shouguang Luqing Petrochemical successful March and Shandong Shengxing Chemical successful April person besides begun to deter other, larger autarkic Chinese refiners from buying Iranian crude, 3 of the sources said.

About 5 plants successful the refining hub of Shandong state person halted purchases of Iranian lipid since past month, disquieted astir being deed by sanctions, 2 trading executives said. That wariness is the main crushed discounts for Iranian Light person widened to $2.30-$2.40 a tube against ICE Brent from astir $2 a period ago, the executives and different root said.

Among the inconveniences faced by the 2 sanctioned teapots, state-run Shandong Port Group, the main larboard relation successful the province, has denied introduction to vessels loaded with crude they person purchased, 5 commercialized sources said. That follows the larboard group's January prohibition connected larboard calls by U.S.-sanctioned tankers.

Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing enforcement declined to comment.

Large authorities banks person besides stopped providing Luqing with operational superior for purchasing crude, forcing it to enactment with smaller banks, 4 of the sources said.

The sources declined to beryllium identified owed to the sensitivity of the matter.

Beijing says it opposes unilateral sanctions and defends arsenic morganatic its commercialized with Iran, which ships astir 90% of its lipid exports to China. However, Chinese customs information has not shown immoderate lipid shipped from Iran since July 2022, with Iranian crude imports alternatively labelled arsenic originating from Malaysia oregon different countries.

SHIPPING, SALES HEADACHES

The Shandong Port Group's banning of cargoes for the 2 refineries has forced them to discharge astatine different ports, according to 3 sources.

In 1 case, the tanker Bei Hai Ming Wang carrying lipid for the Shengxing refinery was rejected erstwhile it sought to onshore astatine the Laizhou port, controlled by Shandong Port Group, astir April 21, according to a root acquainted with the matter.